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Mobile operators appeal against Ofcom’s proposed MTR fee cuts

The UK's largest mobile operators are appealing against a decision by telecoms regulator Ofcom to push through severe cuts in mobile termination rates.

The UK's largest mobile operators are appealing against a decision by telecoms regulator Ofcom to push through...

severe cuts in mobile termination rates.

Mobile termination rates (MTRs) are the wholesale charges a mobile operator levies on other phone companies to complete calls.

Defending the decision in March, Ofcom said its plans will make it easier for operators to comply and lead to a single wholesale charge on different networks. The regulator claimed the simpler regime will benefit consumers by promoting competition.

Vodafone and Everything Everywhere have asked the Competition Appeal Tribunal to order Ofcom to rethink the cuts, and O2 has said it plans to support them, according to the Financial Times.

The charges represent about 10% of operators' turnover. If Ofcom's proposals go ahead, it will mean a significant cut in revenues, the paper said.

Ofcom wants to cut the wholesale charges for connecting calls to mobile networks by 84% over the next four years from 4.18p a minute to 0.69p. However mobile operators say wholesale charges should fall only to 1.25p.

The Ofcom proposals follow a 2009 European Commission recommendation that fixed and mobile termination rates be limited to the incremental cost of providing call termination to other communications providers.

Operators have been using the connecting charges to recoup the £22.5bn cost of radio spectrum. The operators say Ofcom should take that cost into account.

Ofcom said in a statement that it had noted the appeals and was considering them.

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